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Comment by toomuchtodo | Hacker News Reader

This is the point of national IDs, trust anchors, identity proofing, etc.

Credit reporting agencies and financial service providers should be required to use a government provided identity provider (Login.gov is getting there; it’s currently only offering identity services to federal agencies and select state and local governments) or in person proofing with government IDs to verify identity. If they don’t, they are entirely liable for the transaction(s) and related losses, instead of rolling the dice with security question voodoo and foisting the liability on consumers.

Solve digital identity and you solve identity fraud.

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It's hard and there is a lot of weird pushback against national ID cards. E.g. In the UK they had it and then abolished it after public backlash. To me it's utterly backwards to not have one and then point the finger at banks as if they can have a magical investigation and "due diligence" department that can solve fraud and figure out who is who.

Retail stores in the US are required to verify the age of those purchasing tobacco products and alcoholic beverages. They typically limit the types of identification they accept and they could lose their license to sell those products if they sell to those who are under age.

There's absolutely no reason why banks can't do something similar (actually more stringent) when extending a line of credit. The PATRIOT act in the US requires banks to verify the identity of those trying to open an account or secure a mortgage loan, so requiring something similar for lines of credit shouldn't be out of the question.

The root cause of the issue is the law I referenced in the comment[1] that started this subthread. If consumers were able to sue banks and credit bureaus for false information, then banks would have much more incentive to be more diligent. Right now, they can offer "identify theft protection" service where the consumer has to pay them instead. That doesn't give them incentive to be more diligent, and, quite possibly, has the opposite effect.

[1] https://news.ycombinator.com/item?id=28194787

>Right now, they can offer "identify theft protection" service where the consumer has to pay them instead. That doesn't give them incentive to be more diligent, and, quite possibly, has the opposite effect.

That's just good vertical integration.

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